• In the “Where are they now?” category…

    Retired Federal Judge Steven Rhodes, who oversaw Detroit’s bankruptcy case, is working to “mediate a settlement between vehicle owners and Volkswagen in the emissions scandal, The Detroit News reports.

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  • Livestream: Snyder, Duggan & Orr address Detroit’s bankruptcy ruling

    Chief U.S. District Judge Gerald Rosen, Gov. Rick Snyder, Detroit Mayor Mike Duggan, Emergency Manager Kevyn Orr, and a representative from the Detroit City Council will comment on the Detroit bankruptcy ruling and next steps for the city this afternoon. Judge Rosen was the chief mediator in the case.

    View the live stream video below:

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  • Catching up, out of court

    Detroit’s bankruptcy trial had a few days off, but that didn’t stop related news from happening. Here are some of the events:

    Approval of the Great Lakes Water Authority

    As part of the bankruptcy settlements, county executives and Detroit Mayor Mike Duggan last month announced an agreement to form a regional water authority. It only required one county commission’s approval, which came from Wayne County, but last week both the Oakland County Commission and the Macomb County Commission came on board.

    It wasn’t unanimous. In this article in Hometown Life, the two dissenting Oakland County commissioners explain their “no” votes. Meanwhile, Reuters reports the deal, reached through the court-supervised mediation in the bankruptcy case, eases risks for bondholders.


    Three major creditors remain without settlements in the case but have been in closed-door mediations. They are:

    The Macomb County Public Works Commissioner, Anthony Marrocco, who also opposed the regional water deal, has a $26 million claim as part of a lawsuit he’s pursuing against the city related to the Macomb Interceptor Drain Drainage District.

    Financial Guaranty Insurance Co., which insured the Certificates of Participation (COPs) as part of the 2005 pension financing deal. FGIC’s claim is about $1.1 billion in the case. Mediation has been ongoing; Reuters reported last week the talks moved to New York.

    The financial institutions (including hedge funds) that hold the actual COPs are also without a deal in the case.

    More information about attorneys for the three creditors can be found here.

    Investigation Cancelled

    Earlier this month, the Detroit City Council ordered an investigation into the city’s top attorney, charging that he lied to a state loan board. That request has been dropped. Here’s what happened:

    Detroit Corporation Council Melvin “Butch” Hollowell is the head of the city’s law department, meaning he is the chief attorney for the Mayor. But the Corporation Council also represents the City Council, and Council Member Raquel Castaneda-Lopez said Hollowell misrepresented Council’s wishes regarding a proposed sale of land in the Delray community that the state wants for a second bridge crossing between Detroit and Windsor. She asked Detroit’s Inspector General to formally investigate the legality of Hollowell’s actions, saying Council never said its plan was not viable and that the Corporation Counsel acted solely on his own.

    Last week, she dropped that assertion. “Although we are different people from different backgrounds with different opinions and strategies, we are united by our shared goals and a commitment to serve the city,” she wrote in her request to halt the investigation after Hollowell explained his actions.

    Meanwhile, in the neighborhoods…

    While all the court proceedings and administrative actions continue, the Detroit Free Press published a piece reminding the world about how innovative the city’s residents are while they wait for city services to improve. Building off court testimony about firefighters using pop cans to notify them of calls and other examples, Tresa Baldas today reports about original efforts to replace missing manhole covers and re-route water from fire hydrants to businesses. Perhaps when the bankruptcy is resolved, the $1.7 billion the Plan of Adjustment calls for to fund city services will make such stories impossible.


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  • The Week’s Witnesses

    Expect plenty on pensions, art and the Detroit Water and Sewerage Department this week in the city’s bankruptcy trial.

    Over the weekend, city attorneys updated their planned order of witnesses. Here’s that document.

    Among the highlights:

    Emergency Manager Kevyn Orr is expected Monday, Sept. 22

    Annmarie Erickson, executive vice president and chief operating officer at the Detroit Institute of Arts, is scheduled for Wednesday.

    Roger Penske, founder and chairman of the Penske Corporation, is planned for Thursday, and Dan Gilbert, chairman and founder of Rock Ventures, LLC and Quicken Loans, Inc., is expected Wednesday, Sept. 24.

    Today’s witnesses are Glenn Bowen, Alan Perry and Vanessa Fusco. Bowen and Perry both work for Milliman, the city’s actuarial firm that evaluated and analyzed pension funding. Fusco is vice president and associate director of museum services at Christie’s Museum Services.

    9.12.14 Updated City Witness List

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  • What does a Plan of Adjustment ‘yes’ vote look like? [INFOGRAPHIC]

    Detroit’s 32,000 pensioners each have a vote on the city’s Plan of Adjustment, the “blueprint” that shows how the city will restructure its debt and services as it (eventually) emerges from bankruptcy. (Here’s a visual explainer of the 32,000 pensioners.)

    A vote in favor of the plan by both the General Retirement System and the Police and Fire Retirement System will kick in the so-called “Grand Bargain“.

    But a vote in favor of the plan is not as cut and dry as a simple”yay” or “nay”. The “yay” is a bit more complicated. So we broke out what  it looks like in this graphic:


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  • By the Numbers: Detroit Pensioners [INFOGRAPHIC]

    In the infographic below, we break down the 32,000 Detroit pensioner who are voting on Detroit’s plan to exit bankruptcy. This vote is expected to come out on Monday.

    Hover over the “+” icons to get more information.

    Read more of The Detroit Journalism Cooperative’s coverage on bankruptcy and its effects on pensioners.


    A Detroit pensioner describes life in the bankruptcy case

    Steve Wojtowicz worked for the Detroit Water and Sewerage Department for 31 years. It was his first job out of high school. He filed an objection to the city’s Plan of Adjustment, and Bankruptcy Judge Steven Rhodes selected him to testify today. Read More …

    Bankruptcy Judge hears from pensioners, employees

    It’s a day of anger, emotion and personal stories in bankruptcy court. Judge Steven Rhodes invited 80 people to testify from among the roughly 600 objections, saying they represented a cross sample of the complaints. Read More …

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  • Bankruptcy, The City’s Future and Southwest Detroit: Come tell us about it

    CommMeetings-District6-webMaria Salinas says there is plenty to talk about at Next Chapter Detroit’s upcoming community meeting on Wednesday, June 25 in southwest Detroit.

    As executive director of the Congress of Communities, she recently attended a monthly gathering aimed at addressing education issues. During that meeting, she was part of a conversation about what’s changing in Detroit since Emergency Manager Kevyn Orr arrived and declared bankruptcy and Mayor Mike Duggan began focusing on blight removal, lighting installation and garbage collection.

    “It seems like since Mayor Duggan has come in, a lot has been happening: garbage is being picked up, lights are being turned on,” Salinas says. “People have this perception that the man came in and all of sudden everything changed. It’s kind of a misperception.”

    Salinas says the city’s bankruptcy isn’t something that residents necessarily experience or address in their daily lives beyond living in the conditions that reflect why it was declared. They don’t see how the court machinations, implications of the judge’s ruling or the landmark nature of the “grand bargain” really impact their lives in the city.

    “I don’t know that residents really understand what bankruptcy is,” she says. “Their issues are bigger. They’re not thinking about the bankruptcy. Maybe they don’t know what it means, what happened.”

    The Next Chapter Detroit meeting – from 6 to 8 p.m., Wednesday, June 25 at Urban Neighborhood Initiatives, 8300 Longworth – will help residents understand what’s possible in Detroit’s future and give them ideas about how they can be a part of designing it.

    “The bankruptcy has a lot to do with wiping the slate clean and being able to start fresh and new and get new contracts and get rid of contracts or infrastructure in a broken system,” Salinas says. “We’re actually able to take a look and incorporate a new system because basically, through bankruptcy, you can start over.”


  • New Pension Plans for City Employees: City schedules public hearing

    Changes to the future pensions for the city’s active employees have been part of the bankruptcy restructuring and were detailed in the Plan of Adjustment. Employees also have learned about them through information included with the ballots they’ll return as they vote on the city’s Plan of Adjustment as part of the bankruptcy proceedings.

    Now they’ll get a chance to voice their concerns about the changes at public hearing scheduled for  10 a.m., Tuesday, June 24 at the Coleman A. Young Municipal Center. Per the state’s emergency manager law, the new plan requires an ordinance change, which is why the public hearing is necessary.

    Terms of the new plan maintain parts of a defined benefit system but also require a contribution from current employees, which will be deducted from their salaries beginning July 14. For police and firefighters, the contribution will be 6 percent of their weekly pre-tax base salary, while non-uniform employees in the General Retirement System  will contribute 4 percent. For employees hired after June 30, the contributions will be 8 percent.

    “The City also will contribute a match amount to the respective new funds for each employee who participates,” Emergency Manager Kevyn Orr said in a statement.

    The pension restructuring was part of the negotiations between the city, the Official Committee of Retirees and the unions. “The City and its Labor partners have come up with what we think is the best option to strengthen employee pensions so we can continue to meet future obligations in a financial responsible and sustainable manner,” Orr said.

    Orr’s spokesman, Bill Nowling, says the city is holding three forums for employees and briefing directors. In addition, Orr sent an email to employees outlining the changes and various bargaining units also are informing their members.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org  

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  • Bankruptcy Trial Delay: Judge sets Aug. 14 start date

    Detroit’s bankruptcy trial has been postponed until Aug. 14 as Judge Steven Rhodes released a new timeline for the case today. In his order establishing new deadlines and hearing dates, Judge Rhodes says he’s balancing the interests of several stakeholders.

    They include the city’s creditors, employees and retirees as well as state officials and residents of the city, region and state, the judge notes. Rhodes notes the city has caused “unfortunate delays” by not producing requested documents, but he also says creditors have submitted unreasonable requests for information.

    The schedule, according to the judge, is designed to promote a “just, speedy and inexpensive determination” of Detroit’s bankruptcy, which at an estimated $18 billion of debt is the largest Chapter 9 in U.S. history.

    Here’s the full text of the judge’s order with all the deadlines and hearing dates.

    6.9.14 Fifth Order for Schedule

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  • On The Craig Fahle Show: Kevyn Orr takes a victory lap…on the “love train”

    Detroit Emergency Manager Kevyn Orr seems to making a victory lap after the Michigan Legislature passed the “Grand Bargain” bills…and during The Craig Fahle Show today he invited others onto the “love train” of positive momentum. Listen to what guest host Laura Weber Davis and Next Chapter Detroit’s Sandra Svoboda ask him about other current and future happenings in history’s biggest Chapter 9 case.

    Here’s the clip of the “Love Train” invitation.


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